Russia Comes to Maduro’s Rescue After U.S. Sanctions Hit

Just as Venezuelan state-run oil company PDVSA was running out of an obscure product needed to thin out its crude and keep exports flowing in the wake of U.S. sanctions, Russia is coming to the rescue.

Rosneft Oil Co. PJSC, the Moscow-based company controlled by Vladimir Putin’s government, is sending the first cargoes of heavy naphtha to Venezuela since the U.S. imposed harsher sanctions on PDVSA at the end of January, according to shipping reports and a person with knowledge of the situation. The compound is used to thin the sludgy Venezuelan crude so it can move through pipelines to the coast. Without it, crude gets stuck in the fields, unable to be upgraded into refinery-ready oil.

For Venezuela’s embattled leader Nicolas Maduro, a long-time Putin ally, the shipments are critical. They’ll help him stave off — at least temporarily — further declines in oil production, which in turn will bolster his attempt to fend off a push by the opposition to topple his autocratic regime. Oil output has already plunged by two-thirds after years of mismanagement and under-investment. The little that’s left — about 1 million barrels a day — funds the food-handout programs that provide sustenance to a population that’s been thrust into deep poverty under Maduro. Without the cash for those programs, hunger will grow, and with it, so too could pressure to drive him out.

Free Fall

Venezuela oil production is at the lowest level since the 1940s

Source: OPEC secondary sources

While more than 50 countries, including the U.S., have recognized National Assembly leader Juan Guaido as the interim president of Venezuela, Russia sided with the regime of Nicolas Maduro. Russia pledges to help Venezuela to avoid outside military intervention, Parliament Speaker Valentina Matvienko told Vice President Delcy Rodriguez over the weekend. Russia along with China has been a major backer of Maduro, with ties dating back to 1999 when his predecessor Hugo Chavez came to power. PDVSA is moving its European office from Lisbon to Moscow, Rodriguez said Friday.

Two Rosneft tankers, Serengeti and Abliani, will deliver a combined 1 million barrels of heavy naphtha from Europe to Venezuela in coming weeks, ending a month-long gap of supply. The volumes will bring relief but are far from solving the problem. Before the new sanctions were imposed in January, Venezuela was importing between 2 million and 3 million barrels of heavy naphtha every month.

The Rosneft cargoes will replace imports from the U.S., which used to be the top supplier of the diluent. In 2018, all of Venezuela’s imports were from the U.S. Gulf Coast via trading houses including Reliance Industries Ltd., Citgo Petroleum Corp.’s LDC Supply Trading, Vitol Group and Trafigura Ltd.

The diluted crude from the Orinoco Belt will be fed into upgraders owned jointly by PDVSA and companies including Rosneft, Chevron Corp., Total SA and Equinor ASA. The upgraders, which can process 630,000 barrels each day, had been operating at reduced rates since even before the sanctions due to mechanical breakdowns and a shortage of chemicals.

The upgraders have been squeezed from both sides, running short of crude to process and losing the U.S. market, the main buyer for its synthetic oil. Inventories of these grades have been piling up in onshore tanks and on the water.

And, BTW, the USA does not have any legal and moral right to pick some unelected clown as the “true” leader of Venezuela. The USA is undergoing the show trial farce called the Mueller investigation over alleged foreign meddling. But the same clowns that cheer on Mueller feel it is their right to grossly and transparently meddle in Venezuela. This includes even threatening the US of military force.

makati1 on Wed, 6th Mar 2019 11:32 pm

Totally agree, dissident. American hypocrisy big time.

Cloggie on Thu, 7th Mar 2019 12:40 am

Let’s see if these Russian ships make it to their intended destination.

Chrome Mags on Thu, 7th Mar 2019 4:37 am

I love it, really I think this is great stuff. Nothing like two factions developing foreign alliances to escalate the situation into who knows what. The world has reached a point that something like this could get very heated very fast. I’m laughing and watching with baited breath for the next move.

Davy on Thu, 7th Mar 2019 4:41 am

“The Rosneft cargoes will replace imports from the U.S., which used to be the top supplier of the diluent. In 2018, all of Venezuela’s imports were from the U.S. Gulf Coast via trading houses including Reliance Industries Ltd., Citgo Petroleum Corp.’s LDC Supply Trading, Vitol Group and Trafigura Ltd.”

That well cripple those already lousy margins.

Maduro needs to go. The American stooge should not be allow to walk in and assume power. A new election post Maduro is needed then a massive rebuilding effort that must include the US. It as simple as that and anti-American extremist both foreign and homegrown can’t stomach that. This situation has deteriorated that far. Venezuela is about oil and the US is its preferred market and source of diluent. This has to be the path forward. The cost of rebuilding the country is so great these other geopolitical distractions must be ignored. China and Russia need their investments respected at least the ones that were legitimate. Who knows what self-serving arrangements Maduro made? If this path is not taken the bleeding will continue. The illegitimate effort by the US may not succeed but the bleeding will not stop unless a multi-national effort is made.

If Americans don’t defend free speech, religious freedom, gun rights, freedom from unconstitutional searches and seizures, the right to silence, and the freedom from torture and extrajudicial assassination, what part of the Bill of Rights do they support?

What country is this?

Do Americans who defend tyranny feel like traitors?

What is the point of life if you don’t have freedom?

intellectual nematode Alert! on Thu, 7th Mar 2019 6:17 am

Davy on Thu, 7th Mar 2019 4:41 am

JuanP on Thu, 7th Mar 2019 6:43 am

intellectual nematode Alert! on Thu, 7th Mar 2019 6:17 am

Oh Boy, dumbass starts it again.

james on Thu, 7th Mar 2019 8:22 am

you cunts can all get fucked.

Gaia on Thu, 7th Mar 2019 9:02 am

What a bunch of hypocrisy and bullshit from the MSM.

Robert Inget on Thu, 7th Mar 2019 12:41 pm

Predicted on these pages two years ago is finally coming to pass.
Shortages of naptha, only a tiny portion of the problems.

Despite millions of barrels of embargoed heavy oil stored in tankers off shore Venezuela, In the US we are experiencing shortages of heavy oil.

Exxon built huge refineries to process ONLY
Venezuelan heavy. Now if Canada/US had pipeline
space, problem solved. No Keystone, no distillates. (under supply)

Shale oil, great for making gasoline but not diesel. No AG equipment, Choo Choo Trains, grains carrying vessels, semis, home heating, electrical generation, run on gasoline. All this unintentional consequences means higher human and animal food costs, airline losses, at the end of the day, world-wide depression.

More Davy Identity Theft on Thu, 7th Mar 2019 2:59 pm

Davy on Thu, 7th Mar 2019 6:43 am

JuanP on Thu, 7th Mar 2019 3:21 pm

More Davy Identity Theft on Thu, 7th Mar 2019 2:59 pm

Davy on Thu, 7th Mar 2019 6:43 am

shortonoil on Fri, 8th Mar 2019 11:34 am

Russia and China simply don’t have the refining capacity to process all of Venezuela’s production. Neither do they have the diluent that will be needed. Their only goal appears to be to keep US hands off the Venezuelan oil supply for as long as possible. With China now in collapse mode that may not work out too well? It is now cat and mouse time at the end of the oil age. The world’s major powers are setting up to fight over the last few meager scraps.

Whomever ends up in power in Venezuela is completely irrelevant. They will look exactly like the last dozen tin plate, two bit dictators that have always ruled that country. Venezuelans never learned how to do it any other way. Whether they will be a Russian or US pawn is only an answer to the question of who will get the oil. Getting exited over US imperialism, or Russian meddling is peeing down ones own leg. This is about the last of the world’s most essential, and vital commodity. Hopeless idealism can now be left in the days of seemingly never ending wealth.

onlooker on Fri, 8th Mar 2019 6:32 pm

Well said Short. The world is fast headed to a time when no winners are left just a few scant survivors.Face it folks we have made such a mess of things, our species is now in freefall and taking many others with us

makati1 on Fri, 8th Mar 2019 6:41 pm

The only problem is: A dying empire most always start a major war as a last gasp effort to survive. The US is no different. Just look at the mess the US is now and where this is heading. Do you really believe that those delusional psychos in DC (Bolton, etc) would not push the button tomorrow if they decide to? They already believe that they can survive a nuclear war. They don’t give a damn about us.

No, the US has to go down and hard to end its ability to keep destroying the planet one country at a time. Yes, it is about oil, but it is also an empire in decline and losing all of it’s former allies. Isolation is in the Us’ future, IF we can avoid nukes. We shall see.

makati1 on Fri, 8th Mar 2019 6:47 pm

BTW: Imagine if the US was stupid enough to militarily invade Venezuela and Maduro invites Russia to assist? Syria in America’s back yard? Russian bases 1,000 miles from Florida! LOL

onlooker on Fri, 8th Mar 2019 6:50 pm

Yes Makati it looks like end game time is being set up in Venezuela as the Powers vie for that oil

“New estimates from China’s Passenger Car Association paint an outright terrifying picture for auto demand in the world’s most populous nation as we head approach the end of the first quarter. Unofficial auto sales data for February includes China’s passenger vehicle sales down 16.9% YOY to 1,207,538 units for wholesale, and down 19.0% YOY to 1,169,751 units for retail. Luxury brands saw a 2.9% retail sales decline and mainstream JV brands had a 13.8% decline. Domestic brands had a 27.5% decline.”

“Venezuela’s worst ever power outage in recent history has continued since Thursday, as video and photos continue to come out of the cash and resource strapped country showing entire cities blanketed in darkness. Stretching into day two of the mass electrical shutdown, 23 out of 24 states remain in darkness, according to the AP, in a prolonged situation now reaching crisis levels given reports that hospitals are struggling to keep back-up generators running and many businesses are forced to remain shuttered.”

“Although conservationists and biologists have been warning for decades of the increasing threat of mass extinction of species, the FAO study focuses on what its authors call “associated biodiversity for food and agriculture” – that is the networks or ecosystems of living things that underwrite all human food, livestock feed, fuel and fibre, as well as many human medicines. These ecosystems include all plants, animals and microorganisms – insects, bats, birds, fungi, bacteria, earthworms, mangroves, corals, seagrasses and so on – that create soil fertility, pollinate plants, purify air and water, feed and protect fish, and fight crop and livestock pests and diseases. Fish in jeopardy And entirely independently, a team of French scientists has modelled marine biological systems on which humanity’s annual 80 million metric ton haul of fish depends, and warned that climate change could be about to trigger what they call “unprecedented biological shifts” in the world’s oceans. In a new, 576-page report the FAO concerns itself not just with the remorseless loss everywhere of the natural wilderness and the biological variety fine-tuned by three billion years of evolution, but also with the wild ancestors of crop plants and the myriad breeds, strains and variants selected and bred by generations of farmers and pastoralists during the past 10,000 years of settled agriculture.”

makati1 on Fri, 8th Mar 2019 7:33 pm

BTW: $14 Trillion US dollars is equal to about 94 Trillion Yuan today.

makato
please attack supertard harder because i no longer defend his libtarding way
attack harder, using all your breath of that 80’s y/o wrinkly body …the result of all the lemon parties you participate in

JuanP on Fri, 8th Mar 2019 7:53 pm

makato
please attack supertard harder because i no longer defend his libtarding way
attack harder, using all your breath of that 80’s y/o wrinkly body …the result of all the lemon parties you participate in

Davy on Fri, 8th Mar 2019 8:32 pm

AFDF on Fri, 8th Mar 2019 7:38 pm

More Davy Identity Theft on Sat, 9th Mar 2019 1:34 am

Davy on Fri, 8th Mar 2019 7:53 pm

Davy on Sat, 9th Mar 2019 5:09 am

Top of the Morning Friends:

I’m so sorry PO.com readers for losing my shit this morning. I realize it’s not too difficult to figure out I routinely engage in identity theft and deploy multiple sock puppets.

Why? I am sick.

Not davy on Sat, 9th Mar 2019 5:12 am

Davy on Sat, 9th Mar 2019 5:09 am

JuanP on Sat, 9th Mar 2019 5:13 am

Top of the Morning Friends:

I’m so sorry PO.com readers for losing my shit this morning. I realize it’s not too difficult to figure out I routinely engage in identity theft and deploy multiple sock puppets.

Why? I am sick.

Davy aka fmr-paultard on Sat, 9th Mar 2019 5:29 am

I see JuanP everywhere at once, seriously.

makati1 on Sat, 9th Mar 2019 4:56 pm

Just for you, MOB:

“There is an immense amount of criticism of Putin, especially coming from America, most of it empty criticism which ignores realities and genuine analysis. For the more thoughtful, it represents only the stink and noise of propaganda, and not honest criticism in its true sense at all.”

“Russia’s democracy may be quite imperfect, but America’s – what it had of one, it never from the beginning identified itself actually as a democracy – has been transformed into plutocracy with an elaborate window-dressing simulation of democracy, an arrangement in which the state’s resources are committed to its privileged class and the advance of empire. … ordinary Americans have been pretty much reduced to a herd, each with an identifying tag stapled to his ear.” But, some of us escape to better places. Get out of Dodge now!